Newmont offers US$17bil for Aussie gold miner Newcrest

FILE PHOTO: A board displaying stock prices is seen at the Australian Securities Exchange (ASX) in Sydney, Australia, Feb. 9, 2018. REUTERS/David Gray/File Photo

SYDNEY: Newmont Corp made a preliminary offer to acquire Newcrest Mining Ltd, Australia’s largest gold miner, in what would be the largest global takeover of the year so far.

The offer, which values Newcrest at around US$17bil (RM72.4bil), would also be one of the largest in Australian history, according to data compiled by Bloomberg.

Newcrest jumped as much as 14% in early trading, the most since 2008.

Shareholders would receive 0.38 Newmont shares for each Newcrest share held, equivalent to A$27.16 (RM79.96) a share or a 21% premium to last Friday’s close, the Melbourne-based miner said in a regulatory filing yesterday.

The board is considering the proposal, which is conditional on Newmont being granted exclusive due diligence, Newcrest said.

Denver-based Newmont, one of the world’s biggest gold miners with a market value of nearly US$40bil (RM170.3bil), had made an earlier bid offering an exchange ratio of 0.363, which Newcrest’s board rejected.

In September, Newmont delayed a decision on a major investment in Peru until the second half of 2024, citing Russia’s war in Ukraine, rising prices for raw materials, prolonged supply-chain disruptions and competitive labour markets.

Spot gold has gained about 15% since early November, while copper has rallied almost 20%.

“The strong Australian dollar, high gold prices and declining global reserves suggest more acquisitions are likely,” Bloomberg Intelligence industry analyst Mohsen Crofts said in a report yesterday.

The approach comes in the middle of Newcrest’s search for a new chief executive officer (CEO) following the resignation of Sandeep Biswas in December.

Sherry Duhe, the former CEO of oil and gas producer Woodside Energy Group Ltd, is acting CEO until a permanent replacement is found.

Newcrest derives the majority of its revenue from gold and the rest from silver and copper, with mines in Australia, Canada and Papua New Guinea.

The company plans to ramp up the copper component to take advantage of an expected surge in demand for the metal, which is a core material in renewable energy infrastructure and electric vehicles, Duhe said in an interview in November.

Newcrest has engaged JP Morgan Chase and Co and Gresham Advisory Partners Ltd as its financial advisers, and Herbert Smith Freehills as its legal adviser. — Bloomberg

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